SBTi Releases Three Draft Financial Sector Climate Frameworks for 60-Day Consultation

The Science Based Targets initiative published three draft resources for the financial sector for a 60-day public consultation from 15 June to 14 August 2023. The resources include a Financial Institutions Net-Zero conceptual framework, updated near-term criteria aligned with 1.5C, and a Fossil Fuel Finance Position Paper.

The three draft documents collectively form the building blocks of the SBTi's evolving framework for financial institutions. The draft FI Net-Zero Standard Conceptual Framework provides the initial criteria for financial institutions to set credible near- and long-term net-zero targets across portfolios and operations. The draft Near-Term Financial Sector Science-Based Targets Guidance V2 upgrades the existing framework from well-below 2C to 1.5C alignment, with clarifications to improve interpretation. The Fossil Fuel Finance Position Paper sets near- and long-term criteria addressing financial institutions' activities with fossil fuel companies.

The simultaneous release of these three resources marked a significant step in the SBTi's effort to align the financial sector with climate science. Banks, asset managers and institutional investors globally face growing regulatory and investor pressure to disclose and reduce the climate impact of their lending and investment portfolios. For Indian financial institutions subject to evolving RBI and SEBI climate disclosure requirements, SBTi's emerging FI framework provides a globally recognised methodology for target setting and progress reporting.

A webinar was held on 6 July 2023 to present the draft resources, with deep-dive recordings for each document made available after the August 2023 consultation close date. The consultation closed on 14 August 2023, after which the SBTi reviewed responses and updated the near-term criteria — FINT V2 — for a pilot test phase launched in late 2023. The final FINT Criteria V2 was expected to be published in 2024, with the existing V1.1 remaining operational for six months thereafter.

Key figure — 60-day consultation period: 15 June to 14 August 2023